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Tuesday, 27 October 2015

Productivity Commission dumps on land-owners

Governments pass laws to fix the unintended consequences of their previous laws. Today’s new law is tomorrow’s set of unintended consequences.

NZ’s severely hampered housing market has been so skewed, so hampered by decades of previous laws that have stripped property rights from land-owners, made building slower and more expensive, and given gobs of counterfeit capital to borrowers with which to buy existing houses that the median price of a house in Auckland is now rapidly heading towards ten times Aucklanders’ median income.

“Everything” for example does not include making property rights stronger. It does not include reducing Reserve Bank expansion of credit—or taking planners hands off land-owners’ throats. Instead, to “fix” the problems caused by the previous intrusions of government and its planners, the recommendations are for greater intrusions by even bigger government.

What should have made headlines but didn’t was the recommendation for the greatest intrusion possible by big-and-growing government, for an Urban Development Authority given virtually carte-blanche power to do anything they like, including steal your land. In America, where they’ve had these things before, they call these Authorities the Federal Bulldozer. And with good reason. Imagine a Federal Bulldozer driven by Gerry Brownlee and you might get some idea of the problem.

The Commission’s specific recommendation to create Brownlee’s Bulldozer is that

The Government should legislate to create a regime similar to Special Housing Areas whereby certain developments undertaken by local urban development authorities are designated by Order in Council as having the potential to deliver significant numbers of dwellings, and within which the urban development authority will operate with different powers and land use rules.

“Order in Council” means without parliamentary oversight (not that that means much anyway with the currently hopeless opposition). “Different powers and land-use rules” means that the Bulldozer can do whatever the hell it wants, and ignore whatever rules it wants to--much like the Government did when it decided to extend Mt Eden prison to block the view of the mountain itself, something no-one else would have been allowed to do.

More frighteningly, they recommend that

The Government should legislate to grant compulsory acquisition powers to local urban development authorities for ‘designated developments,’ subject to the normal processes, compensation and protections of the Public Works Act 1981.

“Compulsory acquisition powers.”

Got that?

As Daryl Kerrigan might explain, that means the power to acquire your land compulsorily.

In a word: Confiscation.

In the year that Magna Carta was commemorated – the legal foundation of the idea that a man’s home is his castle* – these meddling bastards propose confiscating people’s land to “coordinate residential development.”

At one level, the claim that “compulsory acquisition of property by the state can be justified if it is in the public interest” is circular. What is “the public interest”? The public interest might, for example, involve the protection of private property rights, including the right to hold property undisturbed. This is another example of the Commission’s apparent reluctance to grapple with pervasive government failure and abuse of regulatory powers. The abuses of eminent domain powers in the United States should be a salutary warning here….

As PJ O’Rourke observes, when legislation is introduced about what’s bought and sold, the first thing to be bought is the legislators—those not politically connected are the first ones to suffer by it; those (like Trump) who are the first to gain.

The Commission simply washes its hands of such thoughts.

As if to water down the rather shocking nature of this proposal, the report suggests that powers don’t need to be exercised much, as they can provide leverage (in the same way a mugger with a baseball bat won’t need to hit me to get my money) and the chair is also quoted as suggesting the powers might only be to deal with “holdouts”. But it just is not clear why such powers should be given to public agencies. In [an unhampered market], housing is readily provided by the private sector. Public agencies and political leaders got us into this mess, and why would we expect that new powers would not be abused? Have powers of compulsion worked well in central Christchurch? It hadn’t been my impression.

Has it been anyone’s?

But, I hear you cry, don’t worry: Bill English and John Key would put a stop to this!

"It would be a bit of a stretch to get to compulsorily acquisition, but the idea of better co-ordination of building houses, of getting water and roads in place is an attractive idea," English said [yesterday], adding he wouldn't rule out compulsory acquisition because the Commission had only issued a draft report that was open to submissions.

So it might presage the worst violation of property rights ever in this country. It might show what happens once respect for property rights is dead. It might be against the stated principles of the party presently in power.

So for all those reasons and more, don’t bet against the recommendations becoming law.

* * * *

Oh, there are other recommendations too. Like toll roads, “targeted rates,” and lifting councils’ debt ceilings (have you noticed them being reluctant top borrow?!). All recipes for growing control and growing governments so, quite naturally, all applauded by enthusiasts for both.

“There seems to be a too-ready sense that government is the source of on-going solutions, rather than the source of the underlying problems.” Daryl Kerrigan should have hung that up in his house.

The poorest man may in his cottage bid defiance to all the forces of the Crown. It may be frail—its roof may shake—the wind may blow through it—the storm may enter—the rain may enter—but the King of England cannot enter—all his force dares not cross the threshold of the ruined tenement.” So be it—unless he has justification by law.

3 comments:

Well I was slightly Tuesday bored and sleepy when I came in to this article, PC, now I'm frightened. Anything with the word Commission in its title is going to be difficult to beat up, but you have done well here.

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